It is expected to reduce personal income tax revenue by nearly 34,000 billion VND this year

According to the Ministry of Finance’s public report on state budget estimates, personal income tax collection in 2026 is expected to be lower than planned and decrease compared to last year.

Specifically, personal income tax revenue for the whole year is estimated at 203,200 billion VND, down 33,800 billion VND, equivalent to 14.3% compared to the estimate and 13.6% lower than last year. In 9 months, this revenue only reached about two-thirds of the yearly plan.

The Ministry of Finance said the reason was the increase in family deductions and the change in the progressive tax schedule from 7 to 5 levels according to the Personal Income Tax Law. Changing the declaration period from monthly to quarterly also affects collection progress.

According to the amended Personal Income Tax Law, from January 1, 2026, the progressive tax schedule will be reduced from 7 to 5 levels, with the lowest tax rate of 5% applied to taxable income up to 10 million VND a month. The highest tax rate of 35% applies to the portion above 100 million VND.

Along with that, the family deduction level increased from 11 to 15.5 million VND per month for taxpayers, from 4.4 to 6.2 million VND for each dependent.

In addition to personal income tax, this year’s environmental protection tax collection is expected to fall by about 26,200 billion VND, equivalent to nearly 60% of the estimate. The main reason is that taxes on gasoline (except ethanol), diesel and jet fuel were reduced to 0 VND per liter from the end of March, to stabilize domestic fuel prices in the face of fluctuations in the world energy market due to the Middle East conflict.

Although some revenues did not meet the plan, this year’s total budget revenue is still estimated at nearly 3.06 million billion VND, exceeding estimates by about 21%. Revenues from the non-state economic sector, foreign-invested enterprises and land use fees are all higher than planned.

Of which, land use fees are expected to be about 640,300 billion VND, exceeding the estimate of 166,200 billion VND, which is one of the major contributions to the increase in budget revenue.

The Ministry of Finance said that the Government continues to implement policies to exempt, reduce, and extend taxes, fees, and charges to support people and businesses, with a scale of about 360,000 billion VND. This amount includes exempted, reduced and delayed payment amounts.

In 2027, the Government expects budget revenue of about 3.33 million billion VND, an increase of more than 9% compared to this year’s estimate. The plan is built on the assumption of continuing a number of tax exemption and reduction policies to support production and business.

Total budget expenditure next year is expected to be more than 4 million billion VND, with priority given to increasing resources for development investment (nearly 1.77 million billion VND, accounting for 43%). Overspending is expected to be 4.5% of GDP. This plan is being submitted to the National Assembly for consideration and decision by the Government.